Bankrupt Cryptocurrency Exchange FTX Ordered to Pay $127 Billion to Customers

Relief Ordered by US Court in Landmark Decision

Judge Rules FTX Must Restitute for Bankman-Fried's Fraudulent Scheme

In a landmark decision, a US court has ordered bankrupt cryptocurrency exchange FTX and its sister trading firm Alameda Research to pay $127 billion in monetary relief to customers who suffered losses after the companies collapsed in November 2022.

The order, issued by US District Judge P. Kevin Castel yesterday, stipulates that FTX must pay $87 billion in restitution to victims of former FTX CEO Sam Bankman-Fried's fraudulent scheme. The remaining $40 billion will be distributed to customers who lost funds due to Alameda Research's alleged wrongdoing.

The decision comes after a lengthy legal battle between FTX and the Commodity Futures Trading Commission (CFTC), which had filed a lawsuit against the exchange and Bankman-Fried in December 2022. The CFTC alleged that FTX operated a Ponzi scheme that defrauded customers of billions of dollars.

In a statement, CFTC Chairman Rostin Behnam praised the court's ruling, saying it "sends a clear message that the CFTC will hold accountable those who engage in fraud and manipulation in the digital asset markets."

FTX and Alameda Research are now bankrupt, and the court's order will likely be challenged by creditors. However, the decision is a significant victory for customers who lost money when the two companies collapsed.